114-0509/01 – Managerial Economics (MANE)

The aim of the course is the ability of study – participants to apply general economic theory, mainly microeconomics, to business and managerial decision processes. The course creates platform for purposeful interconnection between traditional economic theory and the theory of decision making. In some sense the course of managerial economics represents the bridge between relatively abstract theoretical background of rational decision making and managerial practice. The emphasis is selectively laid on those microeconomic topics that are the most helpful to realistic interpretation of economic environment surrounding the firm. The natural focus of the course is represented by the theory of the firm. There are overlaps to management, marketing, psychology, macroeconomics, institutional economics, sociology.

I. Market Structure Analysis and the Position of the Firm • Structural Analysis of Industries • Perfect Competition and Monopoly • Monopolistic Competition and Oligopoly • Typology of Competition (market, nonmarket etc.) • Competition Strategies of Firms II. The Firm – its Production, Costs and Profit • Production Function • The Optimal Combination of Inputs • Types of Costs (short run, long run) • Relative Costs of Competitors • Return and Profit • Profit – maximizing Employment of Variable Inputs (Labour, capital, natural resources) • Case studies • Break – Even Analysis, Shut – Down Analysis • Alternative Models of Firm Behaviour III. Demand Analysis • Industry and Firm Demand Curve • Theory of Consumer Behaviour - Consumer Equilibrium • Price and Pricing Practices - Price Discrimination • Game Theory - Types of Game Theories • Touches (contacts) to Marketing IV. Government Intervention in the Market Economy • Government Intervention in the Czech Republic and EU countries - Typical Features and Comparison • Impact of Tax System • Government and Trade Unions on the Labour Market • State Ownership and Privatization • Regulatory Responses to Structure Failures and Financial Crisis (2008, 2009) • State Ownership and Privatization • The Impact of Different Government Types on Economic Policy (one – party gov., minority gov., coalition gov.) V. International Context of Decision – Making in the Firm • Conditions of Trade barriers, Political Events, etc.) • Globalization and its Projections Towards Firms • The In – flow of Foreign Capital (Investments) • Economic Integration (mainly EU) • Monetary Integration - Rate of Exchange (mainly EU) - Interest rate VI. Decision Making in the Environment of Uncertainty • Risk and Uncertainty • Risk and Probability • Risk in Economic Analysis - Indifference Curves • Asymmetric Information • Selected Topics from Economics of Information and from Theory of Information VII. Forecasting in the Firm • Types of Economic Forecasts • Factors Affecting Economic Variables • The Main (Typical) Forecasting Methods • Problem of Accuracy of Economic Forecasts VIII. Institutional Environment of the Firm • Formal and Informal Institutions • Institutional Framework of the Firm – Decision • Law Affecting the Firm - Regulatory Environment of the Firm - The Enforcement of the Law - Antitrust Acts - “Regulator – capture” Theory • Externalitites and their Solution • “Share – holding” and “stake – holding” • Socially Accountable Firms

Wilkinson, N.: Managerial Economics: a Problem-Solving Approach. Cambridge. University Press 2005. ISBN: 0-521-52625-6.